Australia cuts coal output estimates to 2030

An Australian government report has cut estimates for combined run-of-mine (ROM) production of coking and black thermal coal in Australia by 2030 by 6.5pc from the last forecast a year ago. This coincides with projections for lower electricity generation from black-fired power plants.

Estimates for black coal production in Australia are 579mn t in 2030, relatively unchanged from 580mn t in 2019 and an estimated 580mn t in 2025, the Australian government's Department of Industry, Science, Energy and Resources (DISER) said in a new report on the country's greenhouse gas (GHG) emission projections for 2021.

This compares with the emission projections 2020 report that estimated Australian black coal output at 619mn t in 2030.

Australia's black coal production is projected to remain relatively unchanged to 2030 as increases in metallurgical coal production to meet demand for global steel production are offset by declines in thermal coal production used for electricity generation, the DISER report said.

Australia's major coal export markets of Japan, South Korea and China have announced long term emission-reduction targets. These countries took receipt of two-thirds of Australia's coal exports in 2020. The extent to which these targets will impact Australia's coal production to 2030 remains uncertain in the absence of new policies and measures, the report said.

The report estimates that Australia will see 11,000MW of coal-fired power plants going off line by 2030, falling by 14,000MW from 25,000MW in 2019. The report estimates that renewables would generate 61pc of Australia's electricity by 2030 compared with 21pc in 2019 and 9pc in 2005, the latest report said.

The emission projections 2020 report estimated that renewables would account for 55pc of total power generation. Coal-fired power plants accounted for almost two-thirds of Australia's power generation.

The emission projections 2021 report factors in the closures of the 1,680MW Liddell coal-fired power plant in New South Wales (NSW) and the 1,480MW brown coal-fired Yallourn power plant in Victoria. This still leaves almost 6,000MW of coal-fired power output that will need to be shut down if the estimates are proven to be correct.

Around 83pc of Australia's coal is extracted from open-cut mines, which have a lower emission intensity than underground mines, the report said. Emissions from open-cut mines are projected to reduce their share of total production as some large mines are projected to close in the second half of the decade, it said.

Fugitive emissions of carbon dioxide and methane are released at coal mines during the extraction of coal. The 10 largest emitting mines account for 54pc of coal fugitive emissions, the report said. Around 47pc of the methane generated from underground coal mines is currently captured for flaring or for electricity generation, the report said.

Australian coal consumption dropped to a 30-year low of 98.86mn t in the 2019-20 fiscal year to 30 June, falling below 100mn t/yr for the first time in 27 years.

By Kevin Morrison